CBD Regulatory Environment in the EU, UK and the USA

Text: Shelley Stark

As I walk through the isles at any European cannabis expo it is easy to be struck by the differences to those in the U.S. First, there are no THC products, but nor are there any CBD food products because of the EU wide Novel Food regulations which applies to any food stuff not commonly used for human consumption before 15 May, 1997. American CBD manufacturers – with virtually no regulation of cannabinoid infused products – have an enormous advantage. In the EU, any “novel food” must be tested and proven to be safe for human consumption.

Hemp was not always considered “novel.” In 1997, hemp plant products were considered outside the scope of the regulations EC 258/97. And more specifically, “that hemp flowers are considered to be food ingredients, not ‘novel’.

In January 2019, the catalogue entries for “Cannabis sativa L” were updated, so that even products with a natural level of cannabinoids were now excluded. Technically, all products on the EU market containing natural CBD or an isolate or distillate are illegal. The result is a grey market, whose operation hinges on benign authorities in your jurisdiction.

Good news emerged on 2. June 2023, where the EU has been agreed that once again, hemp leaves are considered a traditional food and are no longer considered Novel, but this does not include extracts.

Both EU and UK law provides that any product containing a CBD extract placed on the market falls under the Novel Food regulations. Ultimately, tests must verify whether CBD is safe to ingest in any amount. The FSA will verify results in the UK, while the EFSA is responsible for the EU.

EU Regulatory Environment

In the EU, applications are submitted to the EU Commission, and approval can take up to nine months- just for approval of the application – not the testing that will follow. And while the application carries no fee, collecting the required data just to make the application can be expensive, and can run into six figures or higher. Once the application is approved, there may still be uncertainties, with toxicology testing that can take years to complete, and ultimately must be approved by EFSA (European Food Safety Authority). The required toxicology testing is where things get really expensive, with both the EIHA (European Industrial Hemp Association) and EFSA estimating costs around 3.5 million euros.

The EFSA’s Panel on Nutrition, Novel Foods and Food Allergens (NDA) has received 19 applications thus far for CBD as a novel food, with more in the pipeline. According to their website, NDA chair Prof. Dominique Turck reported that they have identified several hazards related to CBD intake and that many data gaps need filling before evaluations can go ahead. However, she concluded, “It is important to stress that we have not concluded that CBD is unsafe as food.”

As always, with food and drug reviews, it is up to the applicant to prove that a product is safe for human consumption. At present, the EFSA has been unconvinced by the applications submitted so far, and seeks more data as regards the effect of CBD on the liver, gastrointestinal tract, endocrine system, nervous system and on people’s psychological well-being, as well as the impact on human reproduction.

In 2019 the EIHA formed a German corporation, the “EIHA projects GmbH”, formed for the purpose of pooling partners money to pay for the application and toxicity testing. The Novel Food applications (NFAs) for CBD isolate and synthetic CBD were submitted on 4. November 2022 and full spectrum followed in early 2023. The applications must undergo a series of tox studies. The EFSA will start the risk assessment as soon as possible. According to their webpage, the risk assessment can take 9 months. In the case of the application put forth by the EIHA projects GmbH, it is projected that the CBD isolate dossier will be submitted to the EFSA by the end of 2023 and distillate by the end 2024.

The UK Regulatory Approach

The UK Novel Food approach differs from the EU’s. What makes the UK CBD market so robust is that the FSA allows products to be sold as long as they were on the market prior to February 13, 2020 and are linked to applications submitted before March 31, 2021. Currently, some 11,000 products worth a projected 1 billion GBP in revenue remain on the FSA list, having passed prevalidation while the FSA awaits the final toxicology report. Only 400 CBD products have been culled from the list, but not a single application has yet been approved.

Important to note is that due to Brexit, an UK validation when it does come, will not be valid in the EU, but products with an EU application accepted on the Union list, will be valid in the UK.

The American Market

It is the American market that makes our mouth water; where oils, tinctures, candies, cakes, and drinks with every cannabinoid from CBD to Delta 9, Delta 8, and HHC are available and producers are on their way to becoming millionaires. With a market currently estimated at $6 billion, forecasts reach upwards of $16 billion by 2026.

Many of their concerns validate those of the FSA and the EFSA. For example: on their website the FDA makes a reference to only one CBD product that has been approved: a medicine called Epidiolex. The FDA cites the review of the Epidiolex’s application in 2018 when they identified certain safety risks, including potential for liver damage.

?But does CBD harm the liver

Supplements are intended in addition to one’s usual diet while medicines are meant to alter a condition to solve a problem. Epidiolex is a CBD medicine, not a supplement. The recommended dosage of Epidiolex is between 5 mg and 25 mg per kilo body weight per day. That means that an average 70 kilo adult would need to take between 350 mg and 1750 mg per day!

At this moment, the FSA states that a recommended dosage should not exceed 70 mg per day and most recommendations are much lower.

The point is that Epidiolex is an FDA recognized medicine and should not be compared to a supplement. The objective of testing CBD is to confirm its usage as a supplement, so a firm line can be drawn between what is a medicine and what is a supplement.

Another top concern of the FDA is about unproven medical claims. Companies that do not comply with labeling requirements receive warning letters and must respond as to how they will correct violations. Failure to do so may result in legal action, including product seizure or an injunction of sale.

Despite the FDA’s website warning that CBD is not a legal additive to food or drinks, at this point, the Agency seems to limit actions to claims, and not the safety of the product itself, but this may be about to change.

The FDA has made inquiries with the European authority, EFSA, concerning safety requirements. It is quite possible the FDA prefers the ‘EU approach’ over the current ‘wild west approach’ driving the American CBD industry.

So, what does the FDA intend ?to pursue

Most probably new testing requirements for CBD could come into effect. This could eventually mean testing requirements much like those in the EU, before allowing any addition of CBD to food, drink, tinctures and oils. The FDA has reviewed its own studies along with those related to the CBD-based drug Epidiolex and others, and concluded that apart from Epidiolex, there are no FDA-approved products containing CBD that can be lawfully sold as a dietary supplement or food ingredient.

Authorities and industry want regulations that promote business while at the same time protecting consumers.

“The FDA’s inaction for the past year has facilitated an unregulated marketplace,” says Steve Mister, president and CEO of the Council for Responsible Nutrition (CRN). “It’s time for the FDA to announce a legal pathway to market for these CBD-containing supplements and to commence meaningful enforcement against products that flout categorywide requirements for dietary supplements.”

The FDA does not want CBD in food and beverages and likewise claims there is no clear regulatory pathway, citing scientific data on CBD based on the Epidiolex study, a medicine, not a supplement. Parallel to this, other industry stakeholders are urging the U.S. House Committee on Oversight and Accountability to move forward with an investigation into the lack of regulatory action on CBD products by the U.S. Food and Drug Administration (FDA).

Seeking to get congress to act, Chairman Comer and the Oversight Committee states, “The good faith actors in the industry are unable to enter the market and provide people with helpful products because they are currently not distinguished under the FDA from the intoxicating products containing Delta-8.” The good faith actors are most likely the companies that currently have toxicology testing in their portfolios. Serious business requires the security that only toxicology reporting can give. Most of the large industry stakeholders have been engaged in toxicology testing for years, as time, not just funds, is a crucial factor. The EIHA projects GmbH began testing in 2020 and is not yet finished.

Where is the future of CBD ?heading

A review of these various jurisdictions, the EU, the UK, and the USA, makes it clear that testing of CBD to ensure public safety is paramount to staying in business, and indeed to the survival of the industry. In the UK it is imperative to be active in the Novel Food licensing regime to remain on the market. In the EU, it is imperative for a legitimate market at all.

In the USA, it may very well become an imperative, if not because of the FDA or even Congress, but rather because as the U.S. market matures, lawsuits over product liability are almost inevitable, pointing to the lack of toxicology reporting or to the way a product was manufactured or marketed.

What this means for the CBD industry

Companies want a clear path forward for investments in the CBD sector. Litigation is predictable, especially in a litigious society like the U.S., as companies prepare themselves with toxicology reporting that satisfies the FDA. There will be clear winners and losers in the CBD market place, most likely based on a toxicology report.

The EFSA, FSA, FDA, the various state level hemp associations dotted across America and more intriguingly, businesses who see testing requirements as a legal means of ousting the less-wellfinanced competition, are all advocating for testing. This makes sense: There is no future in betting on the unknown. As a distributor of extracts in the EU, and a product developer, and a Novel Food license holder, I see that anything short of a clear safety standard is just guessing with people’s health and thus the company’s future.

?So, what are we left with

Clearly, there is a need for a toxicology report prepared on behalf of the CBD sector. And one about CBD as a food supplement, not as a medicine. It is worth noting that Mister also remarked on how Epidiolex contained high doses of CBD. It needs to be made clear that the medical study of Epidiolex is not consistent with a study of non-medical levels of CBD when used as a supplement.

At present, the biggest challenge facing CBD product manufactures, whether in the USA, EU, or UK, is the lack of controlled studies and thus the inability to illustrate the necessary toxicology reporting in their portfolio. Even in the US, the FDA has said it can’t conclude that CBD meets the standard of “generally recognized as safe” (GRAS) for use in human or animal food. Thus the future of CBD lies in a company’s ability to illustrate by means of a study and accompanying toxicology reports that their brand is firmly in line with the required safety and data standards.

And this is where, I believe, the EU and the UK may have an advantage, through involvement in the Novel Food application and licensing procedures. The needed legal security for the marketing of CBD products can only be achieved

by their approval as Novel Foods. However, the EIHA projects GmbH approximates the costs for an individual company registering CBD isolate and full spectrum distillate under the Novel Food guidelines requires an investment of €3.5 million. As this is prohibitively high for most companies, at the June 2019 General Assembly, the EIHA proposed the creation of a consortium, with the aim of submitting a joint Novel Food application and sharing these costs among the members.

How the “EIHA projects GmbH” Partnership Works

As a partner, I am able to sub-license products or brands in the EU and this license will be valid in the UK when the application is validated and on the Union list, and is equally valid in the USA. The fee structure is based on the aggregated amount of CBD isolate and/ or distillate purchased from a full partner in the consortium.

European companies and brands will have unprecedented toxicology reporting available to them. And should they wish to enter the American market, they will be far more prepared for any FDA regulatory changes than most American companies.

The Atlantic Ocean is getting smaller and it appears that the FDA might very well decide that the US needs the same European safety standards applied to products at home.

Should an American firm wish to market in the EU, I am able to license their product as well as produce the product at our mixing, bottling, packaging facility. Of course, fees will increase over time, which is why I urge my clients to get a sub-license sooner rather than later.

Will the sub-license be valid for the American brand in ?America

The US does not yet have any regulation stipulating the need for toxicology reporting, BUT this is clearly an inexpensive pathway for an American brand to claim toxicology and safety testing PLUS get access to a new market. It is a win-win.

Following a positive outcome of the Novel Food applications, this will complete your marketing goals with a Novel Food license validating your company’s products and guaranteed with an exclusive proprietary study protected for 5 years.

It is imperative for businesses going forward to take a serious look at their future business goals and align themselves with an advancing regulatory environment confirming their commitment to approved quality products.